Sunday, January 10, 2010



Before going through the article, do some Financial Planning for yourself, assess your risk profile.

Most Investors invest without any specific Target/Goal in mind. They do invest in Quality Assets but sadly fail invest without any Clear Targets in Mind.
Clearly decide when and why you need the money., and how much will you need.
Prioritise your wants, needs, comforts, luxuries. Make a list of major goals which you visualise for the future, be it your car, home, child’s marriage, etc. Now, prioritise this list. Also read

It is easy for an Investment Advisor to show you the Right Assets if you specify your Target/Goal. Investing in Debt Funds for your Child’s Marriage is a foolish thing, but at the same time investing in Debt Funds for Next Year’s School Admission is a Wise Thing. Thus, it is imperative to invest with a Specific Target in Mind.
If you have more time to reach a target, then equities is the BEST avenue for you, as equities tend to give you higher retursn over the longer period
Also read

Investing your hard money just to save taxes and making some smart investments in the right assets. It is to do more with the Asset Allocation.

It is always advisable to invest in a Mix of Varied Assets like PPF, Equities, Gold, Fixed Deposits, Property, Insurance, etc. Overexposure/Underexposure to Any and All Kinds of Assets should be Avoided. For Long Term, Equities are the best avenue of Investment.
Studies have shown that getting the Right Asset Allocation contributes more than 90% to the overall Performance of a Portfolio in the Long Run while Security(Equity) Selection contributes less than 10% !!!!.
The right mix of the assets will ensure that your money works hard for you and beats inflation hands down always!!
Asset Allocation is universally acknowledged method of creating Superior Returns over Long Term.


Even Educated investors tend to invest in Insurance as their only source of Investments whereas it is well known Fact that Insurance is the Costliest way of Investment. Insurance is purely for sake of Protection if any untoward event happens to the Earning member of the Family.
The best Insurance is the Term Insurance. Agents avoid telling you about this because that Term Insurance gets them very very little Commission. ULIPs are a strict no-no. ULIPs leave you with insufficient cover and also give you below par returns. The best option would be to take a combination of Term Insurance and Mutual Funds.
Mutual Funds are the better option thatn ULIPs. Your Insurance Part should be taken care by Term Insurance and all the other features of ULIPs are taken care by the Mutual Funds which are very very cheap due to NO Entry Load., whereas ULIPs have a complex fee structure which could eat into your profits.
However, there are some ULIPs which can be looked into, but only if your investment horizon is over 15 years.

Almost Every Investor starts his Investment with Long Term Goal, but very soon as soon he sees the first profits, he becomes Greedy and forgets all about Long Term.
The problem comes when his Short Term Investment starts showing losses, the investor starts withdrawing his Long Term Investment to cover up for his Short Term Investment Losses and ends up failing to Accumulate a Sizeable Amount for his Long Term Goal.
Long Term Investment allows you the benefit of power of Compounding. Sensex, inspite 50% Drop in its value in 2008, has given a Compounded Return of 18% over a period of 30 years!!!! You would do well to read this post

. Do not get swayed by the Market Movements and change your Investment.

Thus, in conclusion, when you start Investment, take your time, do consult a Good Financial Advisor and Invest in Diversified Assets and Stay Invested for Long Term, allowing your Assets to Perform.

Finally, do review your investments at least once every year.

Best of luck,
Srikanth Matrubai


  1. Hello sir,

    i am big fan for your blog. I regular go through your advice and you have great future thinking with a nice income generating mind. I have become your follower now.Keep going with your experts Mutual Fund especially SIP's advice for young people like me.

    need your expert view on my portfolio

    I have started below SIP from Last August

    Birla Sunlife FrontLine equity
    UTI Wealthbuilder series II
    HSBC top 200 fund (dividend)

    I have an life insurance comprising of nearly 5lac
    I have two ULIP
    tata aig invest assure (2004)
    icici prudentail life saver(2007)
    now I am 28year and I have a small kid of 6months. I need to plan for his education, my retirement plan and need to contruct house.

    I am working as an IT lead in one of the leading IT firms in bangalore.

    Please help me to plan accordingly thanks once again.

  2. Thank you Naveen.
    Regarding your portfolio, you may already be knowing that take Consultation Charges for the advise. Do contact me with all your financial details, for further persual in this matter.

  3. Dear Srikanth

    How I wish I had asked for some sage advice on this blog! I have just lost 1 lac in two months by making the foolish mistake of letting Jyoti Portfolio handle my money. They traded in futures and now I am left with only a few hundreds!! Of course they say this is what happens in the market etc etc, but it was just incompetence, carelessness or some such funny stuff.

    Can you tell me if there is any way I can try and recover some or all of this amount by investing in any particular fund or scheme?



  4. Dear Rohini,
    Many people generally do two kind of mistake.
    1. Either to save some petty fees, avoid taking the advise of Financial Planners and end up losing MORE

    2. Many investors just blindly trust their Financial Advisors without asking where their money is being invested and then taken for a ride.

    You seem to be the 2nd type. Sure, do give your money to your Financial Advisor, but 'track' your invesments., and follow them regularly., unless of course, the Financial advisor is of impeccable repute.

    What were you doing when they invested in Futures??. If you do not know the risk of trading in Futures, then you have no right to invest in the same.

    Regarding, whether you can recover the amount by investing in a particular fund or so., then you are knocking at the wrong door. I never ever give false promises.

    What I can do promise that if you invest according to my advise, you will make MORE money than Direct trading!!!

  5. Dear Srikanth

    Thanks for the talking-to; I really deserve it!

    So how do I go about taking your advice?


  6. Well, send me your financial status. Your goals, investment objectives, income profile, risk profile, saving capacity and more.
    We will take it from there.
    Send directly to my email

  7. Great advice do not mix insurance with investing!

    My mutual fund blog

  8. good job in writing this article.
    i learn alot from this blog!..thanks a lot!...

    try also visiting our site in getting rich:

  9. Dear sir,
    i had a policy of HDFC unit link plane since 2008 upto now i had deposited 45000 rupees to this but still my funds value it shows 26000 so i want know should i surrender or continue..

  10. Anil,
    If you are investing Rs.5000 per month for the next 10 years, you are investing only Rs.6 Lakhs, how can you expect 1 crore.
    Your investment should be earning 55% per annum compounded to cross Rs.1 crore.
    Be realistic. And 10 years is not a long term.
    Ideally 20 years is the right time frame.
    May be in rare cases 15 years would be okay, especially when your sip is ONLY 5000.
    But, if the same 5000 sip is invested for 20 years, whereas your investment is below 12 lakhs, the value of investment could easily cross 1 crore at 20% return.
    You only have to invest in the right kind of funds.
    Srikanth Matrubai


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